Disciplinary Action Against Montpetit, In re, CX-94-260

• Citation: 528 N.W.2d 243
• Decision Date: 24 March 1995
• Docket Number: No. CX-94-260,CX-94-260
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Joel A. MONTPETIT, an Attorney at Law of the State of Minnesota.
• Court: Minnesota Supreme Court

Page 243

528 N.W.2d 243

In re Petition for DISCIPLINARY ACTION AGAINST Joel A.

MONTPETIT, an Attorney at Law of the State of Minnesota.

No. CX-94-260.

Supreme Court of Minnesota.

March 24, 1995.

Syllabus by the Court

Trust account shortages in violation of Minn.R.Prof.Conduct 1.15(a) and (b), commingling of funds in violation of Minn.R.Prof.Conduct 1.15(a) and 1.15(b)(4), and false certification that trust account books and records were properly maintained in violation of Minn.R.Prof.Conduct 1.15(b), (d), (g), and (h), warrant a 4-month suspension.

Marcia A. Johnson, Director Lawyers Professional Responsibility Bd., Kenneth L. Jorgensen, First Asst. Director, Betty M. Shaw, Sr. Asst. Director, St. Paul, for appellant.

Jack S. Nordby, Meshbesher, Singer & Spence, Minneapolis, for respondent.

Heard, considered, and decided by the court en banc.

OPINION

PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility brought a petition for disciplinary action against Joel A. Montpetit ("respondent") alleging he engaged in serious trust account violations between January 1989 and April 1992. The allegations arose out of the Director's investigation into a trust account overdraft notice received from Norwest Bank in March 1992.

Respondent was admitted to practice law in Minnesota on October 17, 1969, and currently practices law in a partnership with two other attorneys with offices in South St. Paul, Minnesota. In March 1992, the Director's office received an overdraft notice from Norwest Bank on a trust account that respondent had maintained since 1983. After review of respondent's books and records, the Director's office determined that between January 1989 and April 1992, a total of 76 trust account overdrafts had occurred. There were 14 overdrafts in 1989, 22 in 1990, 23 in 1991, and 17 in 1992. The amounts of the overdrafts ranged from $10.94 to $31,864.10. The March 1992 trust account overdraft was the first one reported to the Director by Norwest. It was determined that from 1983 until April 1992, respondent delegated responsibility for maintaining his trust account to his secretary, who had no special skill or training in maintaining a trust account.

After the Director was notified of the trust account overdraft, but before the Director commenced these disciplinary proceedings, respondent hired an accountant to establish and implement proper law office bookkeeping systems and trust account procedures. An audit of the trust account books and records conducted by the accountants revealed that in 28 of the 40 months audited, there were shortages in the trust account ranging from $2,620 to $71,718.59.

On May 18 and 19, 1994, a hearing on the Director's petition was held before Referee Arthur J. Boylan. The referee concluded that respondent: (1) permitted trust account shortages in violation of Minn.R.Prof.Conduct 1.15(a) and (b), and that the shortages stemmed from respondent's use of trust account funds to cover personal transactions on behalf of himself, his family, and his friends; (2) commingled funds in violation of Minn.R.Prof.Conduct 1.15(a) and 1.15(b)(4), by depositing personal funds into the trust account and by failing to promptly withdraw earned attorney fees from the trust account; and (3) falsely certified that his trust account books and records were properly maintained in violation of Minn.R.Prof.Conduct 1.15(b), (d), (g), and (h). In addition, the referee concluded that respondent did not have actual knowledge that his trust account records were improperly maintained, did not have actual intent to submit the false certifications, and his conduct was not intentional, but negligent. Finally, the referee found that throughout the period the violations were occurring, no client complained about the trust account shortages and no client suffered a financial loss. The referee recommended ¹ that respondent receive a stayed 6-month suspension conditioned on his satisfactory completion of a 48-month probationary period during which he would not be involved in trust account management, his payment of the reasonable costs of the disciplinary proceeding, and his taking and passing the professional responsibility portion of the bar examination.

The Director filed a certificate as to transcript, pursuant to Rule 14(e), Rules on Lawyers Professional Responsibility (RLPR), making the referee's findings and conclusions not conclusive. The Director contends the referee's finding that respondent's violations were negligent was clearly erroneous and argues the referee's recommendation of a 6-month stayed suspension constitutes insufficient discipline for respondent's rule violations. The Director recommends a minimum 6-month suspension with no stay. For his part, respondent admits the misconduct and asserts that because the misconduct was not born of evil intent or malevolence, the referee's recommendation as to discipline should be followed.

A referee's factual findings in attorney disciplinary matters will not be set aside unless clearly erroneous. In re Larsen, 459 N.W.2d 115, 116 (Minn.1990). Furthermore, we defer to the referee's findings when they rest on demeanor, credibility, or sincerity. Id. Here the referee's factual findings are supported by the evidence produced at the hearing. The referee's conclusion, however, that respondent's conduct was merely negligent because respondent did not have actual knowledge that his trust account books and records were improperly maintained is clearly erroneous. While respondent may not have acted out of evil intent or malevolence, he knew or should have known, based on the information available to him, ² the trust account was being mishandled. In re Porter, 449 N.W.2d 713, 718 (Minn.1990). Further, attorneys in this state are charged with knowledge of the requirements for handling client funds. In re Kinnunen, 502 N.W.2d 773, 775 (Minn.1993).

Attorney discipline proceedings are designed to protect the public from attorneys who are unable to properly discharge their duties. Standards for Imposing Lawyer Sanctions Standard 1.1 (ABA 1991). The rationale behind discipline is not to punish the lawyer, but to deter misconduct by members of the bar. In re Boyd, 430 N.W.2d 663, 667 (Minn.1988); see also In re Stroble, 487 N.W.2d 869, 870 (Minn.1992). The final responsibility for determining the appropriate discipline rests with this court. In re Pyles, 421 N.W.2d 321, 325 (Minn.1988). Inquiry into the appropriate measure of discipline is subjective, and while consistency is a goal of this court, the court recognizes that each case involves different facts, violations, and different mitigating and aggravating circumstances. Boyd, 430 N.W.2d at 664-65.

In a case factually similar to the one at hand, this court determined that violations, including misappropriation, trust account violations, office account improprieties, and false certification to the court, warranted suspension for a period of 4 months. In re Gubbins, 380 N.W.2d 810, 812 (Minn.1986). In determining a 4-month suspension was warranted, we noted that no client had lost money, that there was no suggestion of any intent to defraud clients, and that Gubbins had...